Competition Law - Presumption in Section 3(3) contd..
This post is in continuation of this and this post.
Argument 2 - Irrebuttable presumption
Another useful aid of construction is the Parliamentary history which includes the Bill and the Reports of commissions or inquiry committees preceding the introduction of a Bill.( See CIT, MP v. Sodra Devi, AIR 1957 SC 832; Express Newspapers Ltd. v. Union of India, AIR 1958 578; Madanlal F. Dudhediya v. S. Chagandeo Sugar Mills Ltd., AIR 1962 SC 1543)
The recommendations of the Raghavan Committee Report which preceded the passing of the new Competition Act may thus, be looked at. The Report suggested that in general, the rule of reason test is required for establishing that an agreement is illegal. However, for certain kinds of agreements, the presumption is often that they cannot serve any useful or pro-competitive purpose and therefore do not need to be subject to the rule of reason test. They further suggested the following kinds of horizontal agreements to be presumed anti-competitive –
1) Agreements regarding prices, including those that directly or indirectly fix the purchase or sale price.
2) Agreements regarding quantities, including those aimed at limiting or controlling production and investment.
3) Agreements regarding bids.
4) Agreements regarding market sharing, by territory, type or size of customer or in any other way.
The report even referred to this presumption as the per se illegality rule, rooted in the provisions of the US law.
It may be pointed out that a significant number of the members of the Committee were not in favour of identifying categories presumed to be illegal, but the majority felt that such agreements are presumed to be illegal and this recommendation of the majority can be seen to have been given effect to by the legislators.
Thus having regard to the Raghavan Committee Report too, one can conclude that the intent of the legislature was to make the presumption under Section 3(3) irrebuttable.
Argument 2 - Irrebuttable presumption
Another useful aid of construction is the Parliamentary history which includes the Bill and the Reports of commissions or inquiry committees preceding the introduction of a Bill.( See CIT, MP v. Sodra Devi, AIR 1957 SC 832; Express Newspapers Ltd. v. Union of India, AIR 1958 578; Madanlal F. Dudhediya v. S. Chagandeo Sugar Mills Ltd., AIR 1962 SC 1543)
The recommendations of the Raghavan Committee Report which preceded the passing of the new Competition Act may thus, be looked at. The Report suggested that in general, the rule of reason test is required for establishing that an agreement is illegal. However, for certain kinds of agreements, the presumption is often that they cannot serve any useful or pro-competitive purpose and therefore do not need to be subject to the rule of reason test. They further suggested the following kinds of horizontal agreements to be presumed anti-competitive –
1) Agreements regarding prices, including those that directly or indirectly fix the purchase or sale price.
2) Agreements regarding quantities, including those aimed at limiting or controlling production and investment.
3) Agreements regarding bids.
4) Agreements regarding market sharing, by territory, type or size of customer or in any other way.
The report even referred to this presumption as the per se illegality rule, rooted in the provisions of the US law.
It may be pointed out that a significant number of the members of the Committee were not in favour of identifying categories presumed to be illegal, but the majority felt that such agreements are presumed to be illegal and this recommendation of the majority can be seen to have been given effect to by the legislators.
Thus having regard to the Raghavan Committee Report too, one can conclude that the intent of the legislature was to make the presumption under Section 3(3) irrebuttable.
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